What Occurs Whenever a Price Floor Is Imposed Above Equilibrium

question 149

Multiple Choice

What occurs whenever a price floor is imposed above equilibrium price?

• A) The supply will increase due to a higher price until it just equals the quantity demanded.
• B) The demand will increase due to a higher price and a shortage will result.
• C) The quantity supplied will exceed the quantity demanded.
• D) The supply will increase due to a higher price and a surplus will result.

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Definitions:

Coffee

A brewed drink prepared from roasted coffee beans, which are the seeds of berries from the Coffea plant.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity more efficiently than another activity.

World Price

The international market price for a product, influenced by global supply and demand.

Domestic Price

The price of goods and services within a country's borders as opposed to international or world prices.